AFC Energy Regulatory News (AFC)

29 June 2010

AFC ENERGY PLC - DEPLOYMENT OF OPERATIONAL FUEL CELL

AFC Energy plc (LSE:AFC) ("AFC Energy"), a leading developer of low-cost alkaline fuel cells, is pleased to announce that an alkaline fuel cell system has been successfully deployed and operated at Linc Energy's (ASX:LNC) ("Linc Energy") underground coal gasification ("UCG") demonstration facility in Chinchilla, Australia.

The board of AFC Energy (the "Board") believes that this is the first time that a hydrogen fuel cell has been deployed with UCG and that, as such, this represents a major step towards the opportunity of combining UCG and alkaline fuels cells as a breakthrough technology for cleaner coal worldwide. The Board considers that, together, the technologies have the potential to use coal in the cleanest way possible.

Hydrogen produced from Linc Energy's UCG process is an ideal feedstock for AFC Energy's fuel cell systems. Linc Energy will utilise a simple membrane gas separation process on the UCG gases to ensure a rich hydrogen mix is available for the fuel cell system.

During a visit to Linc Energy's demonstration facility in Chinchilla, AFC engineers worked alongside Linc Energy personnel to train them and demonstrate the necessary procedures to enable Linc Energy to operate the fuel cell in the future with minimal assistance and to facilitate the upgrade to the Beta system as it is developed.

The Board believes that AFC Energy's and Linc Energy's integrated technologies have the potential to offer an enhanced efficiency conversion of coal to electricity, whilst enabling up to 99 per cent. carbon capture. Furthermore, this combination provides potential access to billions of additional tonnes of coal in the UK without the environmental impacts of conventional underground or open cast mining. The alkaline fuel cell converts hydrogen to electricity at 60 per cent. efficiency and at an estimated cost per kilowatt hour as low as 4 pence.

The deployment of AFC Energy's Alpha fuel cell system builds upon an order and exclusivity agreement between Linc Energy, AFC Energy and UK-based B9 Coal Ltd signed in December 2009. The relationship was instigated by B9 Coal which continues to lead the project and is actively pursuing opportunities for deploying these technologies in the UK.

Ian Balchin, CEO of AFC Energy said, "We are delighted that this initial deployment has been successful and we are looking forward to demonstrating enhanced performance at Linc Energy's demonstration facility in Chinchilla in the coming months following completion of further trial work with AkzoNobel."

Peter Bond, CEO of Linc Energy said, "Combining UCG with fuel cells for cleaner power generation makes environmental sense. This world-first UCG and fuel cell trial is a milestone for a cleaner energy future. Linc Energy looks forward to the next stage of the project, Beta system commissioning and, ultimately, multi-megawatt deployment with UCG."

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